(AP) - Assembly Speaker Sheldon Silver said late Saturday that New York's Legislature has agreed to a 2009-10 state budget that will keep school funding

ALBANY - (AP) - Assembly Speaker Sheldon Silver said late Saturday that New York's Legislature has agreed to a 2009-10 state budget that will keep school funding flat, restore aid to New York City, and includes increased income tax rates for wealthier New Yorkers.

The agreement announced just before midnight also includes somerestoration of proposed cuts in health care and in higher educationand includes a bigger bottle law, putting nickel deposits onbottled water under the measure that currently covers onlycarbonated drinks.

There is no total yet for the budget but it will include $5billion in spending cuts and use $5 billion of the federal economicstimulus package to help fill some of the gaps created by rejectingincreases in some other taxes and fees.

The temporary income tax increase is projected to provide thestate $4 billion in revenue and will end after three years, Silversaid.

The deal will add two more tax rates over the current highestrate of 6.85 percent. New Yorkers making more than $300,000 butless than $500,000 would face an income tax rate of 7.85 percent.New Yorkers making more than $500,000 would see a rate of 8.97percent.

The measure is a compromise of one first pushed by labor unionsrepresenting health care workers, teachers and other publicemployees to avoid cuts to their funding. Proposals on the tablelast week included a permanent tax rate increase, an increase inthe tax rate for all making more than $250,000 a year, and a higherrate still for those making more than $1 million a year.